Kotak Bank net up 12% to Rs 35 cr

Kotak Mahindra Bank today reported 11.62 per cent growth in net profit in the second quarter of 2006-07 after making additional provisions for standard assets and increased employee costs.

The bank's net profit rose to Rs 34.79 crore in July-September 2006 from 31.17 crore a year earlier, after additional provision of Rs 4.27 crore on standard assets and a provision of Rs 2.51 crore on account of liability for employee benefits in accordance with the new Accounting Standard 15.

"The year-on-year comparison of net profit is not apples for apples as last year Rs 11 crore had moved to the bank on account of royalty from Kotak Mahindra Primus (which has been discontinued from October 4 2005 with the exit of Ford from the subsidiary)," said Uday Kotak, executive vice-chairman and managing director.

"This quarter has seen robust growth in lending activities, as we continue to build and invest in our branch banking network and life insurance business," he added.

The bank's advances portfolio grew by 79 per cent during the second quarter ended September 30, 2006, to Rs 8,386 crore. Its deposits were up 49 per cent at Rs. 8,194 crore. Current account and savings account (CASA) deposits accounted for 21 per cent of the bank's total deposits.

It had around 255,000 deposit accounts as on September 30 against 1,13,000 accounts a year earlier.

Kotak Bank group's consolidated net profit in July-September 2006 rose 13 per cent to Rs 93.90 crore. The consolidated advances were up 48 per cent to Rs 12,067 crore in the second quarter of 2006-07 from Rs 8,133 crore a year earlier, with retail loans comprising 84 per cent of the portfolio.

The group's consolidated net interest margin (NIM) was 5.1 per cent in the second quarter ended September 30, 2006 and it would be around the same level for the bank on a standalone basis.

The bank's net interest income in the second quarter of 2006-07 was Rs 141.28 crore, up 64 per cent from Rs 86.15 crore a year earlier.

The bank's capital adequacy ratio as on September 30, 2006 was 12.38 per cent (11.16 per cent a year earlier) with Tier 1 ratio at 9.69 per cent.

The bank group's consolidated net non-performing assets (NPAs), excluding stressed asset portfolio, as on September 30, 2006 were 0.20 per cent of consolidated net advances against 0.32 per cent a year earlier.